Now that the euphoria surrounding the journey of Barack Obama, the first Afro-American US President, to the White House has come to an end, it is now possible to reflect on some of his policies and decisions in an objective manner. Barack Obama inherited a problematic legacy that includes catastrophes on the security and military levels in both Iraq and Afghanistan, which are still witnessing bloodshed, destruction and horrific killings on a daily basis.
In addition, Obama also inherited an economic file full of problems caused by the former Bush administration and the foolish decisions it made in managing financial issues. It will take an entire decade to recover from the negative impact of those decisions, according to a number of experts and economic analysts.
London recently hosted the G20 Summit that brought together the heads of states of the 20 most influential economic powers in the world. The group began with seven before increasing to eight, then 15 and now 20. This summit came after the financial crisis settled and its effects spread all over the world and in all sectors. Not a single country or sector has managed to escape this crisis and of course, government intervention, through the financial stimulus packages, has become a necessity. The US, Britain, Germany, France and Japan have all pumped enormous amounts into companies in financial trouble whether they were providing financial, industrial or real estate services. Nevertheless, we are yet to see the required psychological shift to reassure investors that the path to prosperity has been cleared.
The G20 countries are all firmly interlinked and dependent on one another. The markets need products, products need distribution, funds need investment channels and investment outlets and opportunities need money to sponsor and support them. This is in brief the situation of the G20. Therefore, there is an excessive sensitivity towards any “convulsive,” unilateral and individualistic policies introduced by one party at the expense of the other. Perhaps what is meant by this is the terrifying fear for the international economy; the increasing talk on “trade protection,” or the reliance of countries on buying and selling products produced within those countries. This campaign is led by the US as clearly stated by President Barack Obama, causing panic and dread in European circles. German Chancellor Angela Merkel expressed her fears regarding this campaign and warned against its hazardous consequences and the possible damage it might inflict on the world economy.
The World Bank sounded a far more important alarm when it revealed that since the G20 Summit, 17 out of the 20 countries have limited foreign trade in different ways in favour of local commodities and products. There is also a request for removing the custom duties added to imported goods, which would be like shooting merciful bullets towards free trade and the World Trade Organization (WTO), the first representative of globalization. There is an increasing concern for the nature of the required role of the International Monetary Fund [IMF] and the importance of raising its capital so that it can support central banks and expenditure on their economies. This concern stems from the fact that the IMF is a non-transparent organization; one cannot determine in advance where the money would be spent. Moreover, let us not ignore the fact that certain countries would shoulder the burden of raising the IMF’s capital and that is unfair.
More so than ever before, Barack Obama is now required to display a sense of international leadership rather than a narrow domestic perspective. It is the duty of the US and its president to assume responsibility for what the foolish policies of the former Bush administration have caused. It must extend a helping hand to the world and there is no doubt that this approach will be met with support and encouragement.